The effect of sanctions on economic freedom

When states are targeted with sanctions, they may respond with alterations of their domestic economies meant to counter any negative effects of sanctions. In this article, we argue that these alterations tend to lead to increased state command of the economy and reduced economic freedom, as sanctions create opportunities and incentives that encourage target states and firms within them to pursue increased state control of the economy. These declines in economic freedom may come about through a number of causal mechanisms, several of which will be elaborated upon in this article. We use large-N empirical analysis of all aspects of the Fraser Institute's Index of Economic Freedom and find that sanctions associate with reductions in most components of economic freedom.